FinCEN lists cryptocurrencies as top AML and CFT priorities
The United States’ Financial Crimes Enforcement Network will continue to closely follow the cryptocurrency industry as one of its top priorities for combating crimes like money laundering.
FinCEN officially announced Thursday that “virtual currency considerations,” or operations involving cryptocurrencies like Bitcoin (BTC), will be among its top national priorities for countering terrorism financing and ensuring proper Anti-Money Laundering policies.
“The establishment of these priorities is intended to assist all covered institutions in their efforts to meet their obligations” under related laws and regulations, the regulator said. FinCEN elaborated that it will soon issue regulations to specify how financial institutions should incorporate these priorities into their AML programs.
“FinCEN recognizes that not every priority will be relevant to every covered institution, but each covered institution should, upon the effective date of future regulations to be promulgated in connection with these priorities, review and incorporate, as appropriate, each priority based on the institution’s broader risk-based AML program,” the authority noted.
Referring to cryptocurrencies as “convertible virtual currencies,” or CVCs, FinCEN pointed out that such assets became the “currency of preference in a wide variety of online illicit activity.” The authority then detailed a wide range of CVC uses by criminal actors, arguing that it is a “preferred form of payment” for buying illicit goods like ransomware tools or even advancing activities like “nuclear weapons ambitions.”
“For example, North Korea-linked cyber actors likely have stolen hundreds of millions of dollars’ worth of CVCs since 2019 through cyber operations against CVC service providers, laundered stolen CVC value through other CVC service providers and CVC wallets, and used the proceeds to help fund weapons of mass destruction and ballistic missile programs,” FinCEN wrote.
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The news comes in line with recent remarks by Brian Nelson, the Treasury’s undersecretary for terrorism and financial intelligence. At a Senate hearing in late June, Nelson announced that he would push for implementation of the Anti-Money Laundering Act of 2020, including some “new regulations around cryptocurrency.”
FinCEN’s increasing attention to the crypto industry comes months after President Joe Biden froze FinCEN-backed rule to monitor crypto on self-hosted wallets as one of the first presidential actions in office. The authority introduced the proposal in late 2020 under former U.S. Treasury Secretary Mnuchin, planning to require all banks and money businesses to submit reports and verify the identity of customers involved in crypto wallet transactions.
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